In Bowers v Marbury Ridge Limited [2024] HKCA 640, the Court of Appeal held that, where the debt underlying a statutory demand, was a debt founded upon a signed loan agreement which consolidates previous indebtedness of the debtor, the doctrine of contractual estoppel precludes the debtor from challenging that part of the previous indebtedness which contained unenforceable penalty interest. The Court of Appeal ruled in favour of the Respondent, and upheld the Court of First Instance’s decision not to set aside the statutory demand. The Respondent was represented by Felix Ng in both the Court of Appeal and in the court below (Bowers v Marbury Ridge Limited [2023] HKCFI 8).
The Court of Appeal went into a detailed analysis of the construction of the relevant clauses in the loan agreement (which founded the debt underlying the statutory demand). The Court of Appeal held that mere exchange of promises by the parties are sufficient to constitute good consideration for the loan agreement, even though those mutual promises remain unperformed before the loan agreement was breached.
Citing its previous judgement in Ng Kin Siu v Gentle Sora Limited [2023] HKCA 944 at paragraph 18, the Court of Appeal pointed out that, insofar as challenge is made to the findings of fact made by the judge on the evidence, the well-established principle is that the appeal court should be reluctant to interfere with the judge’s evaluation of the evidence, unless it is demonstrated that the judge had fallen into palpable errors in the finding of fact. This is so even though the judge’s evaluation of evidence and findings of fact were based on affidavit evidence and contemporaneous documents rather than oral evidence.
The full judgment can be read in here.
